Oregon Governor Kate Brown put into law the Senate Bill No. 1532, raising the minimum wage effective in six years and establishing a three-tiered system that has not been tried anywhere else in the country.
Under the newly signed law, by 2022, the state's current $9.25 an hour minimum would climb to $14.75 in metro Portland, $13.50 in smaller cities, such as Salem and Eugene, and $12.50 in rural communities.
In an interview, the governor stated that raising the minimum wage is one of her priorities for 2016. She added, "This is a path forward - so working families can catch up, and businesses have time to plan for the increase."
She stated, "I started this conversation last fall, bringing stakeholders together to craft a workable proposal; one that gives working families the much-needed wage boost they need, and addresses challenges for businesses and rural economies presented by the two impending ballot measures. I look forward to signing this bill."
President Obama commended the Oregon Legislature and Governor Brown for taking action to raise their state's minimum wage. He advised Congress to follow Oregon's example and raise the federal minimum wage now at $7.25 an hour.
Oregon is considered unique, since it would be the first state without a one-size-fits-all statewide minimum for all workers. The state is severely separated between the west and the east by economic, cultural and political differences. The goal of the tiered approach is to create a balance of the needs of the more urban west, where the cost of living has heightened rapidly Portland and struggling farming communities in the east, as reported by CBS News.
The bill was made as a concession between what unions, businesses and farmers wanted to get. This was an attempt to spoil more aggressive proposals that could go before voters in November.
The President of Oregon Farm Bureau said that the Democrats do not value family agriculture. He explained the enormous increase will force many family farmers to try to find ways to mechanize or transition away from labor-intensive products Oregon is known for, like apples, pears, milk and berries. Unfortunately, some will give up and sell, while others will simply go out of business.
While an economic analyst, David Cooper, said wage increases have never lead to widespread damaging effects, but expressed hesitation about Oregon's regional approach.
"I think any time you create these sorts of somewhat arbitrary geographic districts, that's when you can create opportunities for some sort of economic disruption," he said.
He further stated that, he prefers the whole state to have the same wage level, but at a slower pace by region so that everyone can enjoy the same standard and benefits.
